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Client Update: Breaking Ground

3 August 2012

Welcome to the first edition of Breaking Ground. This regular publication by the Allens Infrastructure and Construction group will keep you informed of the latest news and developments in this area. For more information or for legal advice, please contact one of the Partners listed below. We look forward to hearing from you.

      Michael Hollingdale, Projects Practice Group Leader

• Breaking news
• Published reports and articles
• Industry Standards
• Recent cases
• Recent legislation

Breaking news

Ports

KBR awarded contract at Port of Esperance – 24 July 2012

KBR, a global engineering, procurement and construction company, announced that it has been awarded a design services contract for road and rail works at the Port of Esperance in WA, as part of the overall $120 million port upgrade. KBR will provide the detailed design services as a consultant to John Holland.

Source: KBR press release

Airports

Scoping study into viability of second airport for Sydney commences – 23 July 2012

The Federal Government appoints technical experts and consultants for a scoping study into Wilton's suitability as a second Sydney airport.

Source: Federal Minister for Infrastructure and Transport media release

Mining

Thiess to extend mining operations in Qld – 23 July 2012

Thiess has been awarded a $2.3 billion contract to extend mining operations at Jellinbah Group's Lake Vermont coal mine in Queensland's Bowen Basin.

Source: Thiess Australia News

Rail

Brisbane Cross River Rail Project – 20 June 2012

This project is being scaled back but is likely to proceed, now that an expert panel has reviewed it.

Source: Queensland Minister for Transport and Main Roads ministerial media statements; Queensland Government Cross River Rail website

Roads

Infrastructure Australia proposes privatisation of Victorian freeways – 17 July 2012

Infrastructure Australia has proposed that major Victorian roads, such as the Eastern Freeway, the West Gate Freeway and the Western Ring Road, be privatised and tolled, to raise money for the construction of new roads, hospitals and rail links. 

Source: Tim Colebatch and Josh Gordon, 'Tolls urged on existing freeways', The Age, 17 July 2012

Industry briefing on Victorian East West Link – 17 July 2012

The Victorian Roads Minister held an industry briefing, which was attended by local, interstate and international financiers and constructors, to gain input into the development of a public private partnership (PPP) business case for the East West Link. 

Source: Victorian Minister for Public Transport, Minister for Roads media release; Treasurer media release

Housing

New homes to be built in booming Pilbara region – 18 July 2012

Two hundred and ninety-three homes are to be built in South Hedland, to increase housing availability in WA's booming Pilbara region. The WA Department of Housing has given Fleetwood Corporation a contract to design, build and manage a worker's accommodation village in the area.

Source: Government of WA Department of Housing media release

Hospitals

Exemplar Health Consortium wins $2 billion hospital PPP – 18 July 2012

The Exemplar Health consortium (consisting of Lend Lease, Capella Capital, Siemens and Spotless Group) has won the right to design, build, finance and maintain the major new tertiary teaching Sunshine Coast University Hospital as a PPP with the Queensland Government. The consortium will build a 738-bed tertiary-level hospital and maintain it for 25 years. The Sunshine Coast University Hospital will open in late 2016, with 450 beds and 2,500 staff, and expand to 738 beds and 5000 staff by 2021.

Source: Queensland Premier and Minister for Health ministerial media statements

Stadiums

Contractors invited to express interest in developing Burswood Perth Stadium –18 July 2012

Contractors are invited to submit expressions of interest for the design and construction of the new Perth Stadium at Burswood in WA.

Source: Perth Stadium, Government of WA website

Other projects

New firefighter training facility – 29 July 2012

The Minister for Major Projects announced plans for a new Metropolitan Fire Brigade Training Facility in Craigieburn, Victoria. The complex will cost $109 million and is due for completion in late 2014.

Source: Premier of Victoria media release

Published reports and articles

Infrastructure Australia, Efficiencies in Major Project Procurement (June 2012) Vol 1

Infrastructure Australia released a report calling for nationally applied benchmarks to improve efficiency in the procurement of major infrastructure. The report identifies three types of benchmarks in the procurement process: time, quantitative and qualitative benchmarks. These benchmarks represent 'best practice', which, the report suggests, could, if applied consistently Australia-wide, improve efficiency in the procurement of major infrastructure, by reducing costs to the public and private sectors, and making bidding for contracts more attractive and competitive. The report is on Infrastructure Australia's website.

Infrastructure Australia, Australian Infrastructure Progress and Action (June 2012)

Infrastructure Australia released its fourth annual report to the Council of Australian Governments. In the report, Infrastructure Australia considers the opportunities, challenges and ways forward for Australia's future infrastructure needs, and publishes its Australian annual infrastructure priority list. The report recommends initiatives to increase the pool of funds available for infrastructure projects and the introduction of more efficient financing mechanisms. The report is also on Infrastructure Australia's website.

Release of Your Guide to Dispute Resolution

The Federal Attorney General has announced the launch of Your Guide to Dispute Resolution, a report produced by the National Alternative Dispute Resolution Advisory Council (NADRAC). It encourages the initial attempted resolution of disputes through alternative dispute resolution, rather than through the courts. The guide is on NADRAC's website.

Industry Standards

Changes to Solar PV Standards

Standards Australia has recently released a revised version of its standard governing the installation and safety requirements for photovoltaic (PV) arrays (AS/NZS 5033).  The revised standard varies  the existing requirements relating to array wiring, electrical protection devices (including isolation and disconnection), earthing systems, documentation and commissioning.  While these changes are primarily aimed at domestic PV installations, these changes do have wider implications for proposed commercial and utility-scale solar projects as well as those maintaining existing solar installations. The standards are relevant to all solar PV projects and are mandatory for those holding Clean Energy Council Accreditation.

Recent cases

Thiess Pty Ltd & Anor v Arup Pty Ltd & Ors [2012] QSC 185 – interpretation and rectification of contracts

The Supreme Court of Queensland considered whether the terms of a collaborative consultancy agreement governed a consultant's entitlement to reimbursement for actual cost, or whether the provisions simply set out how payment was to be calculated on account, with final entitlement of actual cost to be determined after an audit.

His Honour Justice Applegarth noted that it made sense for parties to this type of agreement to define the entitlement to compensation in the contract, rather than to leave the parties with the difficult task of trying to agree on the actual costs incurred in carrying out the works. Also, a contract should expressly state if the provisions are only intended to set out the mechanics for payment. Considering the relevant schedule in its entirety, it was held that the contract governed the contractor's entitlement to reimbursement for actual cost. Although the judge's finding meant that it was unnecessary to determine the consultant's alternative claim for rectification, His Honour held that such a claim would also have succeeded because the communications and conduct of the parties evidenced a common intention that the payment multipliers would be as per the agreement. Although a common intention is determined objectively, the parties' subjective intentions are relevant and may even be decisive.

Utility Services Corp Limited v SPI Electricity Pty Ltd & Ors [2012] VSCA 158 – proportionate liability

The Victorian Court of Appeal held that the concept of a concurrent wrongdoer under the proportionate liability provisions in the Wrongs Act 1958 (Vic) may include a defendant who, although not the actor responsible at the time of the wrongdoing, had the liability for the acts or omissions of the original wrongdoer transferred or novated to them.

Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225 – restitution – unjust enrichment

The parties owned land on opposite sides of a road and, as part of the development consent for both properties, the local council was going to construct a roundabout, with the cost to be shared between the parties. After deciding that the council would take too long to construct the roundabout, one of the parties engaged a contractor to complete the work and sought to recover half of the cost on a number of grounds, including unjust enrichment.

The New South Wales Court of Appeal held that there was no liability in restitution because there was no implied request to do the work. The communication between the parties was either non-committal or was able to be explained on a basis other than it being a request. It was unclear what, if any, benefit the other party derived from the early construction of the roundabout and, because the claimant had its own reasons for doing the work, it could not be said that the work was done for the other party.

Abigroup Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FMCA 639

Federal Magistrate Bennet ordered that interim orders granting an interlocutory injunction against unlawful industrial action under section 39 of the Building and Construction Industry Improvement Act 2005 (Cth) should be extended until trial, after taking into account the negative impact that delay would have on the critical path of construction; the importance of the Cairns Hospital to the community of Far North Queensland; and the interests of third parties who have a material interest in the project proceeding in a timely and organised way, such as the subcontractors who are engaged in the works.

Recent legislation